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CurrencyFair: Why it pays when making overseas transfers

At a loss over losing money when you need to send cash back home? It’s a common problem for expats who face large fees and hidden charges from banks. With CurrencyFair, an online marketplace, secure transactions are made faster and far cheaper.

CurrencyFair: Why it pays when making overseas transfers
CurrencyFair co-founder Brett Meyers

The cost of moving country may well mean leaving your family and friends behind but it comes with a wealth of new experiences too. The chance to learn a foreign language and taste different culinary delights are both culturally enriching. But when it really comes to money matters, transferring currency can leave you losing out.

With family or even a home overseas, there’s a good chance you need the services of international banking and, when you are forced to transfer money at a loss, it proves to be pretty frustrating.

It’s an issue that Australian Brett Meyers became all too well aware of after moving to Ireland.  ”I often needed to transfer money back home and got stung on a bank transfer, losing hundreds with a really poor exchange rate, and decided not to get ripped off anymore,” he says.

With a combined background in technology and finance, Meyers and a group of colleagues set out to solve the problem, creating the online marketplace CurrencyFair that was launched in 2010.

“We came up with a way of transferring money internationally without involving international transfers,” he adds. ”It works on the principle that I might be sending Euros back home to Australia for Christmas, at the same time there’s plenty of people with Aussie dollars that want Euros – for example, a person who emigrated there needs to sending money back to pay the mortgage.”

With CurrencyFair, an individual can sell currency in exchange for buying another from someone else. It allows people to either exchange immediately using the best rate currently available, or offer your funds at a rate of your choosing and wait for another customer to match you. 

For a €3 fee, the funds are deposited with CurrencyFair, which ensures the transaction is completed between accounts. By cutting out the banking middleman, Meyers says the model is 90 per cent cheaper than using banks.

“You can save up to €60 Euros when you consider all the sending and receiving charges and on top of that an average of three percent on the exchange rate,” Meyers says.

Security is maintained since the site is registered as a payment institution under a European directive, specifically designed to open up the payment market to non-banks and introduce more competition. It means that CurrencyFair is regulated to provide and execute payment services.

CurrencyFair offers 17 currencies in which to buy and sell and, with $750 million (AUS) already exchanged between members, customers have saved an estimated $25 million.

“Banks are clever in hiding the charges,” says Meyers. “People have no idea how much they are losing on the exchange rate – they just see the fixed fee. That’s what we need people to understand with our service – it’s about real concrete savings.”

This article was produced by The Local and sponsored by CurrencyFair

MONEY

Where in Germany do people have the highest disposable income?

An economic study has shown huge regional differences in income throughout Germany. So which parts of the country have the most to spend each month, and which are feeling the squeeze?

Where in Germany do people have the highest disposable income?

A study by the Economic and Social Sciences Institute (WSI) of the Hans-Böckler foundation reveals stark regional differences in disposable income in Germany. In some cases, households had as much as double the spending money of those in other parts of the country. 

Here’s where people have the most – and least – disposable income each month.

What is disposable income?

The WSI calculated disposable income as the sum of income from wealth and employment, minus social contributions, income taxes, property taxes and other direct benefits or taxes.

What’s left is the income which private households can either spend on consumer goods or save.

The study, which was based on the most recent available national accounts data for 2019, looked at the disposable income of all of the 401 counties, districts and cities across Germany.

Which regions have the highest and lowest disposable incomes?

The study found that the regions with the highest disposable incomes were in the southern states.

Heilbronn in Baden-Württemberg had the highest disposable income of all 401 German counties and independent cities – with an average per capita disposable income of €42,275. The district of Starnberg in Bayern followed in second place with €38,509.

READ ALSO: REVEALED: How much do employees really earn across Germany’s states?

By comparison, per capita incomes in the cities of Gelsenkirchen and Duisburg in North Rhine-Westphalia were less than half as high, at €17,015 and €17,741 respectively. These regions had the lowest disposable income in the country. 

The study also found that, more than thirty years since German reunification, the eastern regions continue to lag behind those in the west in terms of wages.

According to the WSI, the Potsdam-Mittelmark district is the only district in the former east where the disposable per capita income of €24,127 exceeds the national average of €23,706.

Do regional price differences balance things out?

The study also showed that regionally different price levels contribute to a certain levelling out of disposable incomes, as regions with high incomes also tend to have higher rents and other living costs.

“People then have more money in their wallets, but they cannot afford more to the same extent,” WSI scientist Toralf Pusch explained.

READ ALSO: EXPLAINED: When will Germany raise the minimum wage?

Therefore, incomes in the eastern states, adjusted for purchasing power, are generally somewhat higher than the per capita amounts would suggest.

That could explain why, even after price adjustment, the cities of Gelsenkirchen and Duisburg in western Germany continue to be at the very bottom of the list.

Saxon-Anhalt’s Halle an der Saale, on the other hand, which has an average disposable income of only €18,527, benefits from the lower prices in the east.

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